India may accept China’s Asian bank offer

In a pro-China initiative, India is considering Beijing’s offer to become a founding member of the Asian Infrastructure Investment Bank (AIIB).

The move would be a big boost to China’s plans of having its stamp over lending institutions in Asia and counter the US and Japan-dominated Asian Development Bank (ADB).

But New Delhi seeks to get greater clarity to ensure the control of the bank is “fairly equitable”, sources familiar with the development told HT.

“The proposal is being studied in the government. We want to find a way to ensure certain concerns over the control of the bank are addressed so that another avenue is before us to meet huge demand in the infrastructure sector,” said an official.

In fact, Prime Minister Narendra Modi told the Japanese journalists before he left for Japan, “China has invited India to join the proposed AIIB as founding member; India is considering the invitation.

We would like any new multilateral development bank to incorporate the reforms that we advocate for the existing international financial institutions”.

India needs investments of about $1 trillion in infrastructure in the five years till March 2017. Chinese President Xi Jinping announced plans in October last year to set up a new Asian Infrastructure Investment Bank (AIIB) during an Asia-Pacific Economic Cooperation (Apec) meeting in Bali.

Beijing also sees this as a counter to the 67-member ADB, controlled by the US and Japan with 15.7% and 15.6% share, respectively. These two countries have a combined voting power of 26%, compared with China’s 5.47%.